You should price based on the perceived value of your product rather than on cost, as many founders mistakenly use cost-plus pricing, which ignores the full value customers see.

When starting out, focus on finding the right order of magnitude for your pricing rather than overthinking it with complicated charts and formulas.

Three key parts to pricing are: 1) Understand the value equation and price at about a third of the value delivered, 2) Consider your costs to avoid pricing below them, and 3) Differentiate your product to avoid price wars with competitors.

When pricing your product, focus on the value it delivers to the customer rather than just the cost of providing the service.

Don't undervalue your product; while it's okay to start with lower prices, avoid making it a habit as it can lead to long-term pricing issues.

Pricing should be viewed as a tool to learn about customer demand and value perception, helping to refine your product offering.

Pricing isn't permanent; it often takes years to capture the full value of your product, so don't worry about maximizing value early on.

To summarize, charge appropriately, price on value, recognize that most startups undercharge, understand that pricing isn't permanent, and keep it simple.

AI companies should align their pricing with what matters to their customers after demonstrating value, rather than relying solely on fixed or consumption-based pricing models.